We provide high performance advanced composite core conductor cables for
electric transmission and distribution lines. The proprietary new Aluminum
Conductor Composite Core ("ACCC") cable is capable of transmitting twice as much
power as conventional conductors of the same size and weight. ACCC can solve
line sag problems, create energy savings through less line losses, has
significantly lower electromagnetic fields, and can easily be retrofitted on
existing towers to upgrade energy throughput. ACCC cables allow transmission
line owners, utility companies, and power producers to easily replace
transmission lines without modification to the towers using standard
installation techniques and equipment, thereby avoiding the deployment of new
towers and establishment of new rights-of-way that are costly, time consuming,
controversial and may impact the environment. We have established strategic
relationships with existing cable manufacturers to expand production and
facilitate deployment to end users worldwide. Follow-on products include
proprietary electrical towers and poles, wind turbine erection and support
systems. See also Company Web site at: www.compositetechcorp.com. The
information contained on our Web site is not a part of this prospectus.

CORPORATE HISTORY

We were originally incorporated under the laws of the State of Florida on
February 26, 1980 as "Eldorado Gold & Exploration, Inc." On January 13, 1987, we
amended our Articles of Incorporation to change the corporate name to Eldorado
Financial Group, Inc. and modified our capital structure to allow for the
issuance of up to 100,000,000 shares of common stock at $0.001 par value per
share.

On June 27, 2001 we changed our state of incorporation from Florida to Nevada,
by means of a merger with and into a Nevada corporation of the same name formed
solely for the purpose of effecting the reincorporation.

On November 3, 2001, we exchanged 60,000,000 shares of restricted, unregistered
common stock for 100.0% of the issued and outstanding common stock of
Transmission Technology Corporation ("TTC"), a privately-owned Nevada
corporation incorporated on March 28, 2001. TTC had been originally formed to
secure a license agreement related to a composite reinforced electrical
transmission line system that used composite core materials. As a result of the
exchange, TTC became our wholly-owned subsidiary. The Bylaws of TTC became our
Bylaws.

18

In conjunction with the November 3, 2001 transaction, we changed our corporate
name to "Composite Technology Corporation" and amended our Articles of
Incorporation to allow for the issuance of up to 5,000,000 shares of $0.001 par
value Preferred Stock from none previously authorized and for the issuance of up
to 200,000,000 shares of $0.001 par value Common Stock from the 100,000,000
shares previously authorized.

On December 28, 2001, our Board of Directors, and the Board of Directors for TTC
established an initial year-end of September 30 for TTC and, concurrently,
elected to change our fiscal year-end from December 31 to September 30. This
action was taken after an evaluation and review of the November 3, 2001
acquisition transaction, our operations and the operations of TTC.

Our acquisition of TTC effected a change in control and was accounted for as a
"reverse acquisition" whereby TTC is the accounting acquirer for financial
statement purposes. Accordingly, for all periods subsequent to the reset
year-end of September 30, 2001, the financial statements of the Company reflect
the historical financial statements of TTC from its inception on March 28, 2001
and our operations subsequent to September 30, 2001, as retroactively adjusted
for the transactions on November 3, 2001.

Our Bylaws were modified on January 13, 2005 and the overall management
structure of the Company has been revised in the first quarter of fiscal 2005.
These changes are being introduced to improve efficiency and with a view to
moving towards compliance with the new Sarbanes Oxley regulations.

PRINCIPAL PRODUCT

Our principal product is our proprietary patent pending ACCC cable series which
has been developed over the past three years. These bare overhead conductor
cables have unique properties that provide them with significantly improved
product characteristics.

The ACCC Cable:

o transmits up to two times more power than comparably sized conventional
cables in use today, reducing congestion problems;

o can easily be retrofitted on existing towers to upgrade energy throughput;

o allows transmission line owners, utility companies, and power producers to
replace existing transmission lines easily, typically without modification
to the towers;

o can substitute for other cables with greater tensioning on the older
towers to delay the need to replace down rated aging towers, helping in
the management of infrastructure renovation programs;

o the use of ACCC may eliminate the need to establish new rights-of-way that
are costly, time consuming, and environmentally controversial, since ACCC
offers increased throughput, relieved congestion, reduced line losses, and
enhanced safety without the necessity of constructing new lines.

Bare overhead electrical conductor is composed of conductive materials that must
hang in the air; but since conductive materials are not always strong, the
conductor part is held in the air by a strong core. Traditional Aluminum
Conductor Steel Reinforced ("ACSR") uses aluminum to conduct (because aluminum
conducts well and is light) with a steel core to reinforce the cable (literally
to hold it up). Traditional cable designers attempt a compromise between
weakening the core but increasing its conductive capacity, on the one hand and
strengthening the conductor but reducing its conductive capacity on the other;
while simultaneously trying with alloys to increase the operating temperature
without a significant increase in the sag of the cable. This balancing act is
limited by the materials. Cables heat when they carry electricity and metals
soften with heat, causing cable sag.

While some cable designers have been concentrating on making alloys of metals
that will optimize the strength of the material but retain high conductivity,
others have been looking at trying to find alternatives such as new underground
"superconductor" solutions. The fundamental problem with these innovations, we
believe, is that the costs are prohibitive and the results uncertain. Recent
industry research has nonetheless focused significantly on superconductors,
which require constant cooling to cryogenic temperatures. While superconductors
perform with low transmission losses, their much higher price and increased
maintenance constraints make them suitable only for select underground lines in
highly congested power centers, such as New York City. We do not believe that
this technology will be used in overhead transmission or distribution systems in
the foreseeable future.

19

The solution provided by ACCC comes about by going back to essentials: engineer
the conductor to conduct more electricity at the lowest cost, engineer the core
to support the cable without higher temperature sag, and reduce corrosion while
minimizing all unnecessary side effects and problems. The result is the CTC
composite core that supports higher conductive aluminum wires, letting the
aluminum carry the current while the high strength core holds up the cable.

The most widely used bare overhead conductor in the world today is the Aluminum
Conductor Steel Reinforced cable or ACSR. The Company estimates the market for
bare overhead conductor in the United States to be up to $15 billion over the
next 5 years and up to $150 billion worldwide over the same period. Our goal is
to replace the ACSR cable with our ACCC cable.

ACCC cables are designed to be similar in weight and size to typical
conventional ACSR cables. This enables ACCC cables to be used as true
replacements for ACSR in field conditions. ACCC cable's outside conductive wire
portion has the same diameter and helical configuration as the conventional ACSR
cable; it can be handled and spliced with minimal re-training of utility
linemen. Field experience has shown that a normal linesman team can put up the
ACCC cable with the same tools and equipment and in the same timeframes as with
ACSR cables. The only difference is the splicing and dead-ending of the inside
composite core. For this function, accessories are now available that have been
developed by CTC to complement its ACCC cable. The Company manufactures such
accessories from state of the art equipment in California and FCI/Burndy, one of
the world's largest cable hardware manufacturers, has agreed to add the
accessories to its product range. The Company anticipates that the FCI/Burndy
product will be available commercially in fiscal 2005.

ACCC provides a much higher ampacity rating than the ACSR cable: up to twice the
power down the same line. This greater power throughput is primarily due to
higher conductivity as a result of the addition of significantly more aluminum
in the same size cable and the use of an annealed aluminum rather than the less
conductive aluminum typically in use today.

In addition, the material properties of the composite core in our ACCC cable
substantially reduce the problem of conductor sag due to higher temperatures.
The cable is therefore rated at an operating temperature of 180 degrees C and
does not sag appreciably up to that temperature. This compares favorably with
the normal operating temperature of standard ACSR which is 80 degrees C with a
top temperature of about 100 degrees C as compared to the equivalent 200 degrees
C for ACCC. The problem of sag came into prominence at the time of the 2003
blackouts in the Northeastern United States. It appears that the problem
originated with an overheating line sagging too close to the trees causing an
electrical short that stopped the electricity transmission. This forced the
electricity to immediately transfer to other lines, making them operate at a
greater temperature until they too shut down. This resulted in the collapse of a
major portion of the northeast electrical grid that resulted in many hours of
blackout for the city of New York and other places. ACCC does not sag
appreciably with the increased temperature, because, unlike a metal core, our
composite core exhibits much lower thermal expansion properties. In practical
terms, the ability to operate a cable at higher temperatures is an advantage in
that it creates a much greater emergency reserve capacity. Thus, less sag and
additional reserve capacities in the transmission lines used in the northeast
electrical grid might have eliminated or reduced the Northeast black out of
2003.

Corrosion is another problem with the use of transmission cables. Corrosion
damages metals, reducing strength. Salt, SOx and NOx pollution can result in
corrosion of both the aluminum conductor and ACSR steel cores, including
galvanic corrosion due to contact between two different metals. Composites do
not have such problems, being engineered from non-metallic materials. The
non-metallic core is a major factor in the reliability of our ACCC cable.
Additionally, the ACCC core is not only resistant to corrosion and strong but
also not brittle or fragile, like some metal matrix composites proposed in the
market. Our ACCC core is wound around standard drums and handled in production
and in the field by workers and linesmen who do not need to be concerned about
snapping the composite core or shattering it with a sharp blow. Field
demonstrations show that it comes off the reel easily and goes through standard
pulleys, while being pulled to tension in the normal way. It can also cover much
greater spans than other cables pulled to the same tension.

A further problem facing traditional transmission cable is caused by inductive
heating and hysteresis loss. Electrical current carried down the conductor and
the steel core results in the production of both heat and electromagnetic
fields. This causes the loss of approximately on average 9% of the power on the
line, depending on the operating temperatures and length. The use of a
lightweight composite core in the ACCC allows more aluminum to be placed around
the core and reduces the inductive heating, and therefore can reduce the loss of
electricity on the line by a significant percentage. This could represent a
significant saving to the utilities in generation and purchasing costs and could
ultimately bring about a reduction in emissions and benefit the environment. One
proposal for two trans-Kansas transmission lines is being referred to as the
"Green" line because of the ecological benefits of ACCC as well as the fact that
the new lines would carry power from new windpower sites to the grid. Some third
parties using the cable have also identified a reduction in electromagnetic
radiation and corona. These reductions can be understood theoretically. The
Company is currently investigating the extent and nature of the reduction to see
its effect in practice and to understand if there is any appreciable advantage
in densely populated or sensitive ecological areas. The Company does not
anticipate the completion of such analysis until such time as sufficient cable
is being operated in a variety of circumstances that will enable accurate
practical measurements to be made.

The ability to substitute or replace ACSR and other cables with a stronger more
conductive ACCC cable brings other practical advantages that benefit the
transmission line owners, utility companies, and power producers. These
advantages fall into two important categories relating to: (i) existing line
renovation and refurbishment, making the existing asset function better, more
efficiently and deliver more power with less capital expenditure; and (ii) new
line construction which could require fewer support structures since our cable
has significantly less sag.

20

Congestion can be relieved immediately because ACCC cable can be installed and
tensioned identically to ACSR cable allowing it to replace existing overhead
lines without structural modification of the supporting tower systems, new
permissions and prohibitive delays, therefore allowing far more power to be
transmitted.

ACCC cable can be used to replace existing lines on towers that are older and
cannot safely support the high levels of tensioning required. This is due to its
limited thermal expansion, so that ACCC can be installed with less tensioning
while meeting required sag and safety standards. This is important to utilities
that are struggling with the need to replace their entire infrastructure by
helping in the management of their capital expenditure planning.

The fundamental advantage in using ACCC cable to upgrade existing lines is the
elimination of the need to construct new lines. It can eliminate the need to
establish new rights-of-way. This is costly, time consuming, uncertain,
controversial and may impact the environment.

SUMMARY OF EVENTS & STATUS OF OUR PROGRESS DURING THIS PERIOD

During the fiscal period ended on September 30, 2004 we have made considerable
progress in our commercialization path culminating in the completion of product
and production development for the ACCC cable and its necessary accessories. We
are now operating a pilot commercial production successfully and are now
planning the launch of full scale production of ACCC.

Pivotal in this progress was the organization of the business at the new
facility in Irvine, California, the purchase of increasing numbers of production
machines and the addition of new personnel and managers.

The most important external events of the period may be summarized under 4 major
headings, as follows:

The first was the ongoing process of testing and demonstrations that continue to
date. Throughout the period, testing has continued, initially as an essential
part of refining product and production process design, and more recently to
validate the ACCC product. Significant announcements of the publication of
important test data regarding ACCC were made in the first quarter of fiscal 2004
and testing and trials have continued progressively throughout the year to
underline the initial findings made at that time. Significant contributions have
been made by Kinectrics, the University of Southern California and most recently
the field installation at the Electrical Power Research Institute ("EPRI")
Haslet, Texas facility announced in September of this year.

The second was the announcement in May and July of the inclusion of the ACCC
family of cables in the Power Line Systems ("PLS") CADD design program. This
provides engineers with the tools necessary to include the Company's products in
new power line project planning and design.

Third is the enabling breakthrough in our production plans created by the
execution through our subsidiary CTC Cable Corporation of the "Manufacturing and
Distribution Agreements" with General Cable Industries, Inc., (principal US
operating subsidiary of General Cable Corporation ("General Cable") (NYSE: BGC),
a recognized leader in the utility cable market. General Cable produced the
first ACCC cable in the last quarter of fiscal 2003 and the relationship has
become an important part of our North American growth strategy.

General Cable is an important manufacturer in the utility cable industry. The
agreements give the Company a firm basis to ensure that the ACCC cable will be
produced when required; gives the Company significant openings with General
Cable's preferred and regular customers; allows the Company to reduce a number
of planned marketing costs; allows the Company to sell its product through
General Cable with the corresponding name and warranties that are the cachet of
such a corporation; provides a certain assurance to the market regarding
security of supply since General Cable is one of the world's largest cable
manufacturers and has the capacity to meet anticipated significant customer
demand for the product and gives further impetus to the marketing efforts
already undertaken by raising the profile of the Company and its products.

Under the "Manufacturing Agreement," General Cable will apply aluminum strand
around the Company's composite core providing a finished ACCC conductor cable.
They will utilize the utility cable industry standard specifications and
manufacturing processes in carrying out the work.

Under the "Distribution Agreement", General Cable is appointed a non-exclusive
distributor for the ACCC cable for the U.S. and Canadian markets only. General
Cable has built an extensive sales and marketing infrastructure dedicated to the
support of the utility market. In its century long experience supporting the
utility market, General Cable has also developed the relationships with utility
companies that will facilitate the commercialization of ACCC cable.

Finally, June 2004 brought us the announcement of the interest of FCI/Burndy in
manufacturing the accessories necessary for our ACCC core.

This fiscal year also saw the first commercial order for the ACCC cable for a
new transmission line in Kingman, Kansas during the first quarter and the first
completed commercial installation at Holland, Michigan during the last quarter.

During this period we also announced that we have added stability to our
financial situation with the recent issue of $15 million 6% convertible
Debentures to 4 institutional investors and subsequent to year end in November
2004, we have seen the first major stock analyst report to the market on the
business and prospects of the Company (available at
www.cohenresearch.com/reports under our trading name `CPTC').

21

SALES AND DISTRIBUTION

During the process of sales and distribution of ACCC, the Company has identified
two important phases: Market Trials and Accepted Usage. Essentially, sufficient
testing and trials have already been accomplished to stimulate interest among
utilities' engineers. Those with good foresight understand the potential of the
product, but the industry is cautious. Field trials are usually desired to
evaluate the product. This can be accomplished with ACCC running alone or in
conjunction with other potential cables. The Company is ready to sell trial
quantities of ACCC cable to customers almost immediately for field trials
together with installation support and assistance. The Company anticipates
receiving access to data and trial results for potential customers to better
evaluate its ACCC product.

The Company uses three principal strategies for the distribution of its
products.

The first is direct sales of cable to utilities and distribution companies.
Manufactured core is wrapped by General Cable under contract and sold to the
utilities. These sales are arranged through field consultants and by the Company
personnel. The Company participates at trade shows and uses its contacts to
enable it to present to decision makers at the utilities who might benefit from
the Company's products. It is anticipated that these contacts will develop into
an arrangement whereby the utility will try the Company's products in a test
line; which in turn will lead to acceptance and further purchases.

The second is sales of core to cable manufacturing partners. In the United
States and Canada our contractual partner is General Cable. It is anticipated
that General Cable will sell the ACCC products to its customers as part of the
General Cable range of cables. This will lead to the sale of the Company's cable
core, the essential ingredient in ACCC.

The third is using consultants or intermediaries who have relationships with
governments, utilities, engineering companies, cable manufacturers and
interested purchasers. The Company is able to provide such intermediaries with
an interest in the sale of the products in return for sales into defined
markets.

It is expected that the first two sales methods will be used extensively in the
developed markets with a greater reliance on intermediaries and the third method
of sales in certain other international markets where developing contacts with
particular individuals or organizations is an important entry barrier or
prerequisite to conducting successful business.

MANUFACTURING

CTC is now concentrating on the production of the composite core component of
its ACCC cable and allowing specialist cable manufacturers to wrap and
distribute the finished cable in their particular markets. Production for
accessories has also been organized to ensure that hardware supply will match
the cable sales.

The manufacture of the core uses a proprietary pultrusion process. This process
allows numerous glass and carbon filaments to be pre-tensioned, impregnated with
high performance resin systems, and then rapidly cured as the product emerges
through a heated die. The shape of the dies dictates the core configuration and
different designs are utilized for different cable sizes. The proprietary resin
formulations we use are highly resistant to temperature, impact, tensile and
bending stresses, as well as to the harsh environmental conditions encountered
in the field. The product is also endowed with long life and a resistance to
high energy electrical fields.

At present the manufacture of the core is carried out at our facilities in
Irvine California, however, plans are underway to transfer production to a
separate facility as soon as the order volume reaches a critical mass. The
Company can also manufacture using subcontractors if required.

The ACCC core is then delivered to the cable manufacturer, General Cable in the
USA and Canada, for wrapping. The core is shipped on round reels and is received
at the cable wrapping facility in much the same way as traditional steel cores.
Core is delivered in standard lengths to meet stranding limits. The core is then
stranded (or wrapped) with fully annealed aluminum wires drawn into trapezoidal
shapes.

The Company plans to increase its capacity ahead of commercial orders to be in
time for delivery.

Machinery is currently acquired under long-term lease and the Company is
finalizing additional lease line financing to fulfill further requirements.

Our principal raw materials in the production of the ACCC core are glass and
carbon fibers, combined with specific polymer resins. Our cable manufacturers
require raw aluminum rod materials usual in the production of bare overhead
cable. Accessories require primarily high grade aluminum and special steels. The
prices for these raw materials are subject to market variations. Glass and
resins can be acquired from several sources, however the preferred supplier for
the carbon is Toray Industries. While the Company's preference will be to Toray,
the Company is currently qualifying alternative suppliers' carbon material in
its production path.

The Company is continuing the development of its new high-speed production
equipment and is confident that this will be completed in the coming year.

22

INTELLECTUAL PROPERTY

The Company is continuing aggressively to pursue patent protection for all
aspects of its composite materials, products, and processing.

We filed PCT Application Serial No. PCT/US03/12520 on April 23, 2003, and United
States Continuation-In-Part Applications Serial Nos. 10/692304, filed October
23, 2003; 10/691447, filed October 22, 2003; 10/690839, filed October 22, 2003,
10/911072, filed August 4, 2004, PCT Applications Serial Nos. PCT/US02/35199
filed October 22, 2004; PCT/US04/35201, filed October 22, 2004; and Provisional
Applications Serial Nos. 60/537302, filed January 16, 2004; and 60/536164, filed
January 13, 2004. The Company is in the process of formally assigning these
pending patent applications to its wholly-owned subsidiary, CTC Cable
Corporation, a Nevada corporation, formed December 5, 2003. The Company has also
filed corresponding patent applications in over 60 countries worldwide to
preserve and protect its market opportunities. The inventors of record of all of
our applications are Dr. Clem Hiel, Mr. George Korzeniowski, and Mr. David
Bryant. Dr. Hiel is world-renowned in the field of composite materials
engineering and design. Mr. Korzeniowski has a long and very distinguished
career dealing directly with design, building and operating pultrusion
processing equipment for composite products manufacturing. Mr. Bryant is Vice
President, Product and Production Development of the Company and has extensive
experience with the design and production of novel composite products. Our
patent applications deal with novel composite materials, a range of materials
for such composites, processing to produce composite materials, range of
operating characteristics, and various products made from such composite
materials. The primary products disclosed are electrical transmission conductors
that substitute the related composite materials in place of standard steel
reinforced cable. The composite materials are characterized by both chemistry
and physical properties, and particular examples are included. Product
characteristics such as ampacity, elevated operating temperatures, lower
electrical resistance, light-weight, high strength composite fiber packing
density, corrosion, stiffness, thermal expansion, toughness, fatigue life, creep
resistance, wear resistance and fiber strength are addressed. Novel pultrusion
processing techniques are also disclosed, which techniques are applicable to
both the conductor applications as well as other composite based products.
Numerous cross sectional cable designs are disclosed, as well as various methods
and designs for splicing composite cables. Transmission systems incorporating
our novel composite cables are also addressed.

Based on available information and after prior art searches by our patent
strategists, we believe our pending patent applications provide the basis for us
to, over time, be issued a number of separate and distinct patents. Our patent
applications will continue to be supplemented with new information based on our
prototype preparation and testing. Our patent applications specifically focus on
materials and conductors conforming to industry specifications and requirements,
as presently in place and as anticipated for the future.

The Company has also acquired licensing rights pursuant to a License Agreement
dated February 6, 2003, between W. Brandt Goldsworthy & Associates, Inc. (WBGA)
and the Company. The License Agreement grants the Company the exclusive use of
any components in the Company's ACCC products that include items contained in
patent claims granted to WBGA by the U.S. Patent and Trademark Office ("USPTO").
The License Agreement also provides the Company a broader non-exclusive license
for any other pultruded composite core electrical cable designs characterized by
WBGA as CRAC-1. The License Agreement bears a 2% royalty on net sales revenues
for that component of ACCC using any patent claim issued to WBGA and a 1%
royalty for any component of the CRAC-1 technology, if any, used by the Company,
provided WBGA is granted valid patent Claims by USPTO. To date no such claims
have been granted, and the USPTO issued a final rejection of the patent
application on October 18, 2004. WBGA or its assigns has a six-month period to
respond to the final rejection or appeal the final rejection. The Company was
notified that the rights to the License Agreement as Licensor were transferred
to James M. Dombroski pursuant to Mr. Dombroski's execution of a lien on the
asset dated December 29, 2003. Mr. Dombroski subsequently transferred his rights
to the License Agreement to GIFT Technologies LP on April 13, 2004. The duration
of the License Agreement is for the life of any patent granted to WBGA by USPTO
for the specific technologies licensed herein.

We are currently pursuing patent protection for other composite based products
and applications. These additional patent applications generally relate to
composite-based towers and poles. The Company is currently preparing a number of
additional patent applications and it is anticipated that these will be filed in
the near future.

MARKETABILITY

The U.S. Department of Energy reported some years ago that much of the nation's
electrical transmission and distribution infrastructure is rapidly becoming
incapable of meeting the demands of our modern economy. This is the result of
the increasing demand for the consumption of electricity (it has more than
doubled over the last 10 years) coupled with aging of the existing grid (which
is in need of replacement and is prone to failure).

Utilities have been adding to their electrical generation capacity. In the most
recent 3 years more generation capacity (in gigawatts) has been added than at
any time since 1945. However, during the same period the investment in delivery
systems for the new capacity (the grid) has not significantly increased. This
will have to be rectified if the new generation capacity is to be efficiently
utilized. This translates into the necessity for a large increase in investment
into the bare overhead cable (conductor) systems that make up the electrical
grid. Our ACCC cable is a type of bare overhead cable (conductor).

The currently available data projections for the size of the market for bare
overhead conductor are conflicting, with different sources assigning widely
different figures to the overall market size and to the markets for different
countries. This is probably due to the fact that analysts can easily confirm the
present size of the Grid and its required expansion but cannot adequately factor
in two important considerations. The first of these is that it is often unclear
how much of the existing grid must be replaced and how quickly. This information
is often confidential and in all cases sensitive (with its combination of
considerations of safety, ecology and commercial impact). The second is that
while new capacity is required on the grid it is often assumed that this will
necessitate new lines. These are far from easy to arrange. Obtaining rights of
way and permissions sometimes takes years and is of uncertain outcome.

23

Introduction of the Company's products may help to alleviate some of these
issues since ACCC enables providers to increase transmission capacity to handle
expected load increases without resorting to the uncertainties of relying on the
permits for and construction of new rights of way. More fundamentally, ACCC is a
true replacement for existing lines that requires less tensioning and can
therefore be used on weaker towers.

Our ACCC product targets an industry which is mature in most industrialized
countries such as those in North America and Europe but developing in various
other countries around the world, such as China and in South America.

COMPETITION

The primary competing product to our ACCC in North America and in most parts of
the world is still traditional ACSR, a hundred year old technology. ACSR cannot
satisfy a number of requirements facing the modern grid and distribution
operator. Awareness of this issue has resulted in a number of companies with
various alternative products coming forward. These may be summarized as follows:

o Widely used in Europe, certain cable manufacturers already produce
variations of ACSS (Aluminum Conductor Strength Steel). This aluminum
conductor is reinforced with higher strength steel alloys in the core that
allow the use of trapezoidal shaped wires, similar to the Company's cable.
The ACSS still has a number of problems, particularly in retrofit
applications. When compared with equivalent sized ACSR cables, the
trapezoidal ACSS cable is heavier and thus may require higher tensioning,
potentially resulting in tower modifications. It is also more expensive
than ACSR cable. Variations of ACSS also exist in the shape of the
aluminum stranding with both trapezoidal and `Z' shaped cables offering
less wind noise than traditional ACSR. When compared with the Company's
ACCC cables, we believe that the ACSS cable: (i) has less aluminum
conductive cross-section than ACCC cables resulting in marginally less
power capacity; (ii) has much higher sag than the ACCC equivalent; (iii)
has greater line losses associated with inductive heating of a
ferromagnetic core; (iv) has more electromagnetic field generation; and
(v) with respect to new line projects, would require a greater number of
larger, heavier, taller (and therefore more expensive) support structures
than those required for ACCC cable.

o 3M Company reports that they have developed Aluminum Conductor Composite
Reinforced (ACCR), a conductor with a core composed of metal/ ceramic
matrix composite wires with diameters ranging from 0.073" (1.9 mm) to
0.114" (2.9 mm) that appears to be wrapped in a thin adhesive backed metal
foil, probably because the composite is abrasive. 3M claims their ACCR to
have increased ampacity over ACSR by 1.5 to 3 times at very high
temperatures. Its price is reported to be seven to ten times higher than
ACSR. We have not seen any published performance data from independent
third parties as to certified test results for this conductor, although
our study of available data indicates that our ACCC cable will have higher
performance specifications at temperatures within normal operating ranges.
3M Company literature also indicates that some modifications from the
ACSR-norm in handling and installation procedures may be required since
the ACCR core is reportedly brittle and may snap or shatter if handled
incorrectly. 3M literature also notes that the conductivity of the
aluminum is lower than the aluminum in conventional ACSR and also lower
than our ACCC. 3M claims to have made commercial sales of the product and
ACCR is under evaluation alongside the Company's ACCC.

o Korea Electric Power Corporation completed 24 overhead transmission line
upgrade projects between 1994 and 1997 where they replaced existing
conductors with higher ampacity conductors using existing towers and
rights-of-way. They used the "Super Thermal Resistant Aluminum Alloy
Conductor with Invar Reinforcement" ("STACIR"), first introduced in 1994.
The cable can operate to 210 degrees Celsius with its ampacity
approximately doubled. The cost of STACIR is estimated to be four to seven
times higher than ACSR and has slightly increased line losses and weighs
more than comparable sized ACSR. Limited market acceptance of this product
has occurred, although we believe that it is mainly in Korea.

o A multi-sectioned cable known as the GAP cable has been introduced by
Sumitomo. This conductor has been used by a number of companies
internationally and has reportedly experienced mixed results in various
applications. In particular it is noted that when fitting the conductor it
must be first hung without significant tension to `relax' the cable,
installation is difficult and expensive with more frequent, costly
dead-ending. The Company is not aware of any unreserved acceptance of this
cable and understands that those companies using the cable are actively
seeking an alternative. We also believe that significant structural
strengthening of towers is required for its use.

o Several companies are in the preliminary stages of developing
superconducting technology in the form of liquid nitrogen-cooled
superconductor power cables, which are capable of conducting with very low
losses. The disadvantage is that the cost of such cables is expected to be
up to fifty times the current price of conventional underground systems.
It would, therefore, only be practical in specific short underground
installations in densely populated downtown metropolitan areas. Overhead
use is not presently anticipated.

Based upon the available test results, field trials and commercial sales, the
Company believes that its ACCC family of cables meets or exceeds industry
standards for quality and performance when compared to ACSR; and is superior in
terms of performance/cost to any competing alternatives. We believe that its
versatility and performance enable ACCC to replace the cable products currently
being purchased by grid and distribution operators with an identifiable cost
advantage when compared with capital expenditures or when considering operating
savings.

24

The term `composite' covers a wide variety of materials from cements to metal
matrix composites, through carbon fiber and fiberglass. The Company is not the
first entity to attempt to develop a composite core for a transmission cable,
and cannot protect all conceivable composite cores by its patent applications.
The Company believes that its patent pending ACCC composite core is the most
cost effective material for use in bare overhead conductor with the best
properties most aptly suited for the `task' required of a bare overhead
conductor.

The Company has also filed additional patent applications to address additional
subject matter complementary to the information set forth in its original patent
applications. This is intended to serve as an additional barrier to the
development of competing composite products. A company interested in developing
a competing product would be investing in composite core development knowing
that there were additional patent applications claiming subject matter that may
have been filed but not yet public.

The Company produces the composite core component of the ACCC cable. Any
qualified cable manufacturer should be able to apply the annealed aluminum to
the outside of core to produce the finished product. Since the Company intends
to enter into agreement with cable manufacturers that are willing to wrap the
core to produce the ACCC final product, such manufacturers are not immediately
competitors of the Company in themselves, although other products they produce
may compete with the ACCC. The Company's strategy is currently to make the
production of ACCC available to cable manufacturers that have an expanding
market and are willing to invest in bringing ACCC into their markets. In the
United States market, however, the Company has signed an exclusive manufacturing
agreement with General Cable that establishes General Cable as the only
manufacturer of ACCC for the US and Canadian markets until 2007. There are three
principal manufacturers of traditional bare overhead conductors (ACSR) which
supply the United States market: Southwire Company, reportedly with over one
third of the US market; General Cable Corporation and Alcan Cable, both
reportedly supply most of the balance of the market. Given the current exclusive
manufacturing arrangement, the Company's General Cable production of ACCC will
be in competition with both of the other key producers in the market.

Outside of the United States and Canadian markets, all the key manufacturers of
ACSR cable are the Company's potential partners. These include General Cable,
Nexans, Lamifil, Pirelli Cable and De Angeli Prodotti in Europe; Condumex IUSA
and CME in Mexico; Jaingsu Far East Group Company, Ltd., in China; Aberdare
Cables in South Africa; and numerous others.

GOVERNMENTAL REGULATION

We are not aware of any specific government regulations governing the design and
specifications of bare overhead conductors in the United States. We do not
believe the manufacture of ACCC cable is subject to any specific government
regulations other than those regulations that traditionally apply to
manufacturing activities such as the Occupational Safety and Health Act of 1970.

Our intended operations are generally subject to various federal, state, and
local laws and regulations relating to the protection of the environment. These
environmental laws and regulations, which have become increasingly stringent,
are implemented principally by the Environmental Protection Agency and
comparable state agencies, and govern the management of hazardous wastes, the
discharge of pollutants into the air and into surface and underground waters,
and the manufacture and disposal of certain substances. The Company anticipates,
and to date has had, no difficulty in meeting these standards.

Certain international markets may require government or type registration
approvals from leading companies or public or semi private bodies or
associations. It is the Company's policy to examine these barriers to entry and
to select markets which will be able to introduce its products in this initial
phase without a significant, lengthy or costly registration or approval
procedures.

RESEARCH AND DEVELOPMENT

We have spent considerable funds on research and development of our proprietary,
patent pending ACCC and related electrical system component technologies to the
point where the ACCC system is now commercially available. We continue to invest
in the further development of this product with a view to speeding up and
lowering the cost of production, as well as enhancing the product's properties
and characteristics. We also anticipate the need to continue spending
significant funds to protect the ACCC technologies.

In Fiscal Year 2004 we spent $114,959 on development costs; in fiscal year 2003
we spent $3,210,289 on development costs and $638,555 in Fiscal Year 2002.

EMPLOYEES

As of the date of this filing, we currently have 43 full time employees and use
the services of 15 consultants on a regular basis for a variety of tasks and
responsibilities. Additional consultants are employed as required for specific
tasks. We have 2 corporate officers: one Executive Officer and the Corporate
Secretary. The Executive Officer is the Chief Executive Officer (`CEO'). He is
supported by 2 individuals that fulfill the role and functions of the offices of
the Chief Financial Officer (`CFO') and the Chief Operating Officer (`COO').
These 2 individuals are both employed as consultants under an Engagement
Agreement. The CEO is additionally supported by a senior Vice President, Office
of the CEO whose role is to pursue marketing strategy and to assist the CEO in
the fulfillment of his duties.

25

There are five senior corporate departments: Operations, Finance, Intellectual
Property, Information Systems, and Investor Relations. These are directly
overseen by the CEO.

The Operations Department is the responsibility of the acting COO. Since January
5, 2005, this function has been carried out by a consultant and, following a
probationary period, it is anticipated that this individual will be appointed to
the position of COO and as a full Executive Officer of the Company. In the
Operations Department, the acting COO presides over 3 additional senior
operations departments: Product & Production Development, Business Development &
Sales, and Quality Assurance & Quality Control.

One senior manager, employed as a consultant, was appointed the corporate
secretary with the task of improving the efficiency of the Company's operations
and preparing the Company for Sarbanes Oxley compliance and the listing of the
Company on an Exchange. He is also responsible for the European, Middle Eastern
and African Markets. It is anticipated that he will be handing over his
responsibilities to the Office of the CEO and the acting COO before returning to
the Middle East.

The CEO remains the acting Chief Financial Officer (`CFO') in charge of the
Finance Department, however, these duties are now carried out by a consultant
and following a probationary period, it is anticipated that this individual will
be appointed to the position of CFO and as a full Executive Officer of the
Company. The Company already employs a Controller and Accounting Manager in the
Finance Department.

Three senior corporate managers handle, respectively: Investor Relations,
Quality Control and Assurance, and Product and Production Development.
Information Systems and Intellectual Property Strategy are handled by outside
consultants.

The Company employs 4 additional managers in its Product and Production
Development Department and a total additional staff of 24 complete the Product
and Production Development Department and handle the current production of core
and accessories. The Business Development and Sales department is comprised
primarily of consultants with one senior field person. In the administration
section, there is one HR manager; there are 4 corporate administrative
assistants; 2 logistics personnel; one security officer; and one maintenance
person. The Company also uses the services of part time employees as required.

We have entered into "at-will" and "as needed" consulting contracts with various
marketing and business consultants and composite experts to provide us with the
necessary technical skills which are required to execute our business plan and
bring our products to market. Contracts also exist for legal, patent strategy
and accounting services. Recruiting efforts will continue as we bring our
products to market.